Asia Pacific Market Remains Strong for Boeing Business Jets

Last year at ABACE 2013 Steve Taylor, BBJ president, presented a model of Nanshan Jet’s BBJ to Yu Bin, chairman of Nanshan Aviation Development Co.

At ABACE last year, Boeing Business Jets (BBJ) marked the service entry of a BBJ owned by charter operator Nanshan Jet Co., which is based in Yanti, China. This year BBJ and Nanshan Jet are partnering on their presence at ABACE 2014 and are also cohosting a dinner for select customers, according to Chuck Colburn, BBJ director of marketing.

Boeing derived the original BBJ from the 737-700, giving it the wing of the 737-800. Fuselage extensions added the BBJ2 and BBJ3 to the lineup of airplanes, all derived from the single-aisle 737 series of airliners. The VIP models derived from Boeing’s twin-aisle, widebody jets are the BBJ 747, 767, 777 and 787. The company, Seattle-based Boeing Business Jets, was formed in 1996 and delivery of the first BBJs (sometimes the called BBJ 1) took place in 1999.

Coming of Age

Some 18 BBJs of various models are now based in Greater China, Colburn told AIN. The Asia Pacific region remains strong for BBJ, he said, adding that six of the total of seven BBJs that Boeing delivered last year worldwide found homes in the Asia Pacific, and five of these six are in China.

Interestingly, Chinese customers are now apparently considering preowned BBJs, as well as new aircraft, as three of the six BBJs entering service in the country last year were preowned, said Colburn. In previous years, aircraft salesmen and others have frequently told AIN that many high-net-worth individuals in China preferred buying new aircraft and that many would not even consider used business jets. Perhaps this attitude is shifting somewhat (a suggestion found elsewhere in AIN’s pre-ABACE research). However, Colburn did mention that one of the three preowned BBJs delivered in China last year had been in storage, so it was essentially new.

China-based charter operators have seen some decrease in business, he said, since the Chinese government banned travel on private aircraft by government employees (as part of the fallout from the crackdown on corruption which has seen a lot of other expenditures curtailed). “Some charter operators with BBJs in their fleets, such as Deer Jet and Beijing Airlines, are now looking for growth opportunities outside China, including in the U.S., Europe and the Middle East,” Colburn explained.

He confirmed that the Asia Pacific region remains the strongest market for both BBJs and airliners, with China the strongest country in the region. “Asia Pacific is home to 17 percent of all BBJ variants and 20 percent of the customers for these airplanes,” he said.

The Middle East is another strong region for the BBJ. Colburn said that Royal Jet of Abu Dhabi has floated a request for proposals (RFP) for seven new aircraft to replace its current fleet of six BBJs. The RFP stipulates the delivery of one new aircraft every year starting in 2015, he explained, and that announcement of Royal Jet’s selections is expected in the middle of this year.

Considering another region, Colburn said, “The Russian market was starting to look like it was improving,” but current political events in Crimea and Ukraine have made the future of this market unclear now.

Meanwhile, Boeing delivered the second and third BBJ 787 in February, after the first one had been delivered in December. The company plans to deliver three more later this year, Colburn said, as well as the first BBJ 747-8.

Overall, Colburn sees the prospects for BBJ sales improving. “The market has hit bottom and is on an uptick,” he claimed. “Sales year-to-year are improving. We’re getting more inquiries and I think many will turn into sales.” In 2013, BBJ had seven gross orders and one cancellation, for net sales of six aircraft, he said.

The company is also developing the BBJ Max 8 and 9, based on the Boeing 737-800 and -900 Next Generation series to replace the BBJ 2 and BBJ 3. A BBJ Max upgrade of the BBJ 1, which would require an increase in max gross weight, is still being studied, said Colburn. At NBAA 2013 in Las Vegas, Boeing, in cooperation with Aviation Partners, announced its new “Split Scimitar” winglets as a retrofit for existing BBJ, BBJ2 and BBJ3 jets.